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Free to Choose
The Classic Inquiry Into the Relationship Between Freedom and Economics
Free to Choose (1980) explores the relationship between freedom and the choices an individual is allowed to make in regards to the economy. Friedman reveals to us that economic freedom is an essential part of liberty. He details the myriad ways in which government regulations and interventions chip away at our fundamental right to make decisions in our own self-interest.
- Anyone wanting to learn about the government’s role in the economy
- Anyone interested in exploring the benefits of economic freedom
- Anyone interested in learning more about how free markets work
Milton Friedman won the Nobel Prize for economics in 1976. He holds a PhD from Columbia University and was an economic advisor to Ronald Reagan in the 1980s. He has written over 11 books about economics and individual freedom.
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Free to Choose
The Classic Inquiry Into the Relationship Between Freedom and Economics
- Read in 15 minutes
- Contains 10 key ideas
Synopsis
Free to Choose (1980) explores the relationship between freedom and the choices an individual is allowed to make in regards to the economy. Friedman reveals to us that economic freedom is an essential part of liberty. He details the myriad ways in which government regulations and interventions chip away at our fundamental right to make decisions in our own self-interest.
Key idea 1 of 10
The power of the market lies in voluntary actions by individuals, not in government intervention.
Today, many people believe that governments should determine the price or supply of goods in the market.
However, this is wrong; in reality, government intervention creates confusion in the functioning of the market.
This is because when the government intervenes in the market, it distorts the signals that tell consumers the true value of a good or service.
For example, during gasoline shortages in the 1970s, the government limited the price that gas stations could charge to keep gas affordable. The direct result of this was a flood of people buying gas at the same time, leading to increased demand and further shortages. Because the price did not rise naturally in response to the shortage, as it would have done in a free market, consumers did not choose to conserve or find alternatives to gasoline.
Government action therefore exacerbated the crisis.
Without the proper price transmitting information to consumers, they are unable to know how to spend their money in the most efficient ways.
So although it might seem strange, the best way to ensure that the market works effectively is to leave it alone. This way, the market is left to individuals voluntarily pursuing their own self-interests. Only by making individual consumers the main actors in the market will the proper value of goods and services, based on their demand and supply, be transmitted.
One of the most well-known examples of such voluntary action actually comes from outside the economic market: the development of language. This developed from the bottom up with no central control. People cooperated with each other because it was in the interest of the individual as well as the group to share and create common communication.
When people freely traded words, it benefited both parties – no control or planning by a central authority was needed.
Key ideas in this title
- The power of the market lies in voluntary actions by individuals, not in government intervention.
- Economic control by governments over individuals erodes personal freedom.
- The Great Depression was caused by the very institution created to prevent it: the Federal Reserve.
- Inflation is a direct result of government manipulation of the economy and is a hidden tax on the population.
- The modern welfare state is inefficient and routinely hurts the poor it was designed to help.
- Our education system has deteriorated as local and parental control has been replaced by federal bureaucrats.
- The government’s desire to protect consumers impedes economic growth and causes prices to rise.
- Attempting to protect workers interferes with the natural protection provided by the free market.
- We can regain our freedom by limiting the power of government and returning control to the people.
- Final Summary
